Sport fund levy 'will force up price of liquor, smokes'

In January the National Legislative Assembly passed the Thailand Sports Act mandating that the Sports Fund receive a 2-per-cent annual contribution from every cigarette and liquor exporter, importer and producer based on how much excise tax they pay. The Act is expected to come into effect this quarter.

“The contribution to the Sport Fund may cause the operators to push the cost to their customers by raising the retail price of cigarettes and liquor by 2 per cent,” said a source at the Finance Ministry.

According to the ministry’s data, the Excise Department collected around Bt200 billion in excise tax last year. 

Of that amount, Bt76 billion came from taxes imposed on beer, Bt64 billion came from taxes on other liquor products and Bt61 billion came from cigarettes.

The Finance Ministry source said the total amount paid into the sports fund would be between Bt3-4 billion.

A Thailand Tobacco Monopoly source said the contribution to the fund would cause the state enterprise’s production costs to rise by between Bt1-2 billion annually.

The source said that currently TMM was also required to contribute Bt1.6 billion to the Thai Health Promotion Foundation and Thai Public Broadcasting Services.

The new contribution would increase that figure to up to Bt2.8 billion a year compared to a Bt6 billion net profit. 

“It was learnt that the Act will come into an effect by the end of this quarter. So, the Thailand Tobacco Monopoly will have to lift its retail cigarette prices,” said Daonoi Suttiniphapunt, acting managing director of TTM.

She said TTM’s Bt6 billion net profit was down from Bt7 billion in 2013 due to higher expenses from having to relocate its factory from Bangkok to Rojana Industrial Estate. She added that TTM planned to launch two new cigarette brands, focusing on general customers. The enterprise has a 76 per cent share of the domestic cigarette market.